JetBlue Airways has reported its results for the first quarter 2009 featuring a 9.3% operating margin and the airline's first profit in the first quarter since 2005.
Operating income for the quarter was $73 million, resulting in the 9.3% operating margin, compared to operating income of $17 million and a 2.2% operating margin in the first quarter of 2008.
Pre-tax income for the quarter was $20 million, which included a special charge of $8 million related to the valuation of JetBlue's auction rate securities. Excluding this special charge, JetBlue's pre-tax income for the quarter would have been $28 million. This compares to a pre-tax loss of $16 million in the first quarter of 2008.
Net income for the first quarter was $12 million, or $0.05 per diluted share. Excluding the special charge, JetBlue's net income for the quarter would have been $20 million, or $0.08 per diluted share. This compares to JetBlue's first quarter 2008 net loss of $10 million, or $0.05 per diluted share.
"Thanks to the tremendous efforts of our crewmembers, we reported our first profitable first quarter in four years," said Dave Barger, JetBlue's CEO. "Despite a challenging economic environment, we continued to outperform the industry in unit revenue growth during the quarter. We believe our unique value proposition, strong brand, and award-winning customer service will continue to differentiate JetBlue within the industry."
Operating revenues for 1Q09 totalled $793 million, representing a decline of 2.9% over 1Q08, driven in part by a 5.4% decline in capacity. For the first quarter, revenue passenger miles decreased 8.0% to 6.0 billion, resulting in a first quarter load factor of 76.0%, a decrease of 2.2 points year-on-year.
Operating expenses for the quarter decreased by 9.9%, or $79 million, over the prior year period. JetBlue's operating expense per available seat mile (CASM) for the first quarter decreased by 4.8% year-over-year to 9.06 cents. Excluding fuel, CASM increased 8.9% to 6.36 cents.
JetBlue modified its fuel hedge portfolio at the end of 2008. During the first quarter, approximately 9% of JetBlue's fuel consumption was hedged, resulting in a realised fuel price of $1.96 per gallon, a 25.9% decrease over 1Q08's realised fuel price of $2.65. JetBlue realised $56 million in fuel hedging losses during the first quarter.
"By restructuring our fuel hedge portfolio at the end of last year, we essentially prepaid a portion of our 2009 fuel expense during 2008," said Ed Barnes, JetBlue's CFO. "As a result, we realised significant cash savings from lower fuel prices during the first quarter."
JetBlue has hedged approximately 8% of its remaining projected fuel requirements for 2009. The airline expects an average price per gallon of fuel, including the impact of hedges, of $1.93 in the second quarter and $1.90 for the full year 2009.
Looking ahead, for the second quarter of 2009, JetBlue expects to report an operating margin between eight and ten percent. Pre-tax margin for the quarter is expected to be between one and three percent.
For the full year 2009, JetBlue expects to report an operating margin between 11 and 13 percent. Pre-tax margin for the full year is expected to be between four and six percent.
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